NEW YORK-The astounding success of NTT DoCoMo’s mobile Internet access service is a resounding note of affirmation to proponents of wireless Web services, said Crispin K. Vicars at the Yankee Group’s conference Nov. 8.
By the end of September, DoCoMo’s wireless Internet service had 1.7 million customers, and it expects that number to mushroom to 4 million by year-end, he said at Yankee’s meeting, “Mobile.Net: The Next Generation of Wireless.”
Average revenue per user is about $12.50, including a $2.50 fixed service fee and 100 packets daily, which translates to about $7.50 in user charges. At that rate, Japan’s largest wireless carrier can expect $270 million of new revenues in 1999 from Internet services.
“The lesson is that you can make money in mobile data immediately, even at lower speeds,” said Vicars, who is a director of global wireless/mobile planning services for the Boston-based Yankee Group.
As is its custom, Japan-based NTT DoCoMo chose a proprietary solution, in this case using a service based on Compact HyperText Markup Language. Access to the service requires purchase of a premium-priced iMode compatible handset that offers access at speeds of up to 9.6 kilobits per second.
By the end of the year, DDI Cellular Telephone Group, also of Japan, plans to introduce an Internet access service based on the Wireless Application Protocol, Vicars said.
Germany’s Mannesmann Mobilfunk launched its D2.Wap service in August. Targeted toward young people, the pricing plan requires no activation fee and costs about 22 cents per airtime minute of use.
Under the D2.Wap umbrella, three primary information categories are available today, Vicars said. D2 Manager offers electronic mail and notification. D2 Navigator provides information services, telephone directories, news, traffic, travel, banking and brokerage services and stock tips. D2 Hotlinks provides automatic links to the Web sites of content providers working with Mannesmann. Mannesmann has an agreement with Yahoo! Germany and 15 content providers. Yahoo! today offers D2.Wap customers access only to its news and sports information, but it plans to offer finance, weather, electronic mail and a personalized service in the future, Vicars said.
Omnitel Pronto Italia, of which Mannesmann is the majority owner, is offering its Omnitel 2000 services, which Vicars called “a very aggressive platform with voice recognition for service access from any type of telephone, accessibility to Omnitel by computer and WAP-enabled navigation from a mobile phone in an `Internet-like’ way.”
Omnitel 2000 already offers marketing-based services, like news and entertainment, and it is expanding on these offerings. Its Omnitel 2000 ShopCenter offers electronic commerce capabilities for banking and financial services, auctions, travel, books and music, sports and electronics equipment, wine and luxury goods. This month, the carrier also is making available virtual communities in music, economic, soccer and automotive areas.
With its voice-activated access, Omnitel 2000 is very similar in its sophistication to the Department of the Future service offered by Sweden’s Telia Mobile, Vicars said.
Telia’s goal is to promote non-voice traffic, which it expects to grow to half of its wireless revenues by 2004, compared with 5 percent in 1998. The DOF data offering costs $42 monthly, excluding airtime charges and voice communications. DOF subscribers get a 40-percent discount on their short messaging services.
The carrier projects that information services and electronic commerce will account for 55 percent of data revenues by 2004 and e-mail for 30 percent. Data usage will grow in tandem with wireless telephony, which by 2004, will comprise 60 percent to 70 percent of Telia’s total revenues.
“The glue keeping DOF together is the unified messaging platform, which combines e-mail, fax, voice mail, multiple devices and streaming of voice mail (with) real audio,” Vicars said.
Canada’s Bell Mobility, by contrast, offers its Mobile Browser service with a simple pricing plan based on 15 cents per minute of use. There is no activation charge or monthly service fee.
“Bell Mobility seeks to be the lowest cost supplier of traffic, so it is focused on managing the pipe,” Vicars said.
“It fills in local content itself, but it has many partnerships with content providers.
Bell Mobility offers its Mobile Browser customers “a complete solution” that includes devices, middleware, systems integration and dial-up requirements, he added. It also permits customers to manage, alter or pay their accounts online in a manner similar to that Nextel Communications Inc. provides for its customers who want to implement group calling changes.
Subscribe now to get the daily newsletter from RCR Wireless News
“Bell Mobility is not bundling voice and data as Sprint PCS has done and Bell Atlantic Mobile is contemplating,” Vicars said.
Sprint’s recently debuted Wireless Web program emulates Bell Mobility pricing, he noted.
The Sprint PCS Wireless Web Connection allows digital phones to act as modems when hooked up by cable to a portable computer or personal digital assistant. Its Wireless Web Browser allows customers with specially equipped phones to view text-only versions of selected, Internet-based content. By mid-2000, all of Sprint PCS’ phones will be data-capable, Vicars said.
Bell Atlantic Mobile announced at the Yankee Group conference it would begin offering a new Web Access service Nov. 17 in all its East Coast markets.
“We have years of experience in the implementation and management of commercial [Internet Protocol] networks,” Dennis Strigl, president and chief executive officer of Bell Atlantic Global Wireless, said.
“We’re offering the mass consumer market a simple and inexpensive way of connecting to the Internet and e-mail wirelessly using the same digital handset they use for voice services.”
BAM Web Access will be a $10 monthly add-on to DigitalChoice voice price plans, and customers can share the monthly bundle of access minutes between their voice and data service. They will have access to at least 20 content providers.
Initially, Bell Atlantic will sell Qualcomm 860 digital phones with built-in microbrowsers for $120. In December, the carrier plans to sell additional Web-enabled phones, including the Qualcomm PDQ 800, which has a built-in PDA, and the Motorola StarTac 7860. Customers who want to use a laptop for full Web browsing can buy a phone-computer connection kit for $80.
“BAM and Vodafone (Airtouch plc) have four or five billing vendors on the back end. That is a challenge for their (American wireless joint venture) in taking advantage of their national scope,” Vicars said.
“They also must make sure their platform can handle circuit- and packet-switched data.”
All carriers face the challenge of keeping services simple for end users as they manage “an increasingly complex business model” associated with burgeoning wireless voice and data communications, he said.
There are two basic strategy choices, each with its own advantages and disadvantages.
Wireless carriers can choose to serve as the lowest-cost router of traffic and concentrate on management of network resources, while partnering with Internet service providers, which retain customer billing relationships.
“The pro is in simplifying the business model and maximizing free cash flow. The cons are you can forgo revenue opportunities, and you become dependent on third-party relationships for provisioning and quality,” Vicars said.
The alternative for carriers is to become a complete, end-to-end provider of services, including billing and Internet services provision.
“The seamless solution set allows a carrier to maximize revenues,” he said.
“But there is the complexity of the business model, the investment that must be made in brand marketing and channel distribution and the possibility that you could be excluded from some relationships if you maintain your own ISP subsidiar
y.”